Electronic Payment Systems, LLC v. Electronic Payment Solutions of America, Inc. et al
Filing
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ORDER granting 64 Motion to Stay Discovery, by Magistrate Judge Michael E. Hegarty on 06/24/15.(nmarb, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No. 14-cv-02624-WYD-MEH
ELECTRONIC PAYMENT SYSTEMS, LLC,
Plaintiff,
v.
ELECTRONIC PAYMENT SOLUTIONS OF AMERICA, INC.,
JAY WIGDORE,
MICHAEL ABDELMESSH, a/k/a Michael Stewart,
FIRST PAY SOLUTIONS, LLC,
FIRST DATA CORPORATION, and
WELLS FARGO BANK N.A.,
Defendants.
ORDER GRANTING MOTION TO STAY DISCOVERY
Michael E. Hegarty, United States Magistrate Judge.
Before the Court is an Uncontested Motion to Stay All Discovery Pending Resolution of
Certain Defendants’ Motion[s] to Dismiss filed by Defendants First Data Corporation and Wells
Fargo Bank [filed June 23, 2015; docket #64]. Pursuant to 28 U.S.C. § 636(b)(1)(A) and D.C. Colo.
LCivR 72.1C, this matter has been referred to this Court for disposition [docket #65]. Neither the
remaining Defendants nor the Plaintiff oppose the motion, and the Court finds that oral argument
would not assist the Court in its consideration of this matter. For the reasons that follow, the Court
grants the motion to stay.
BACKGROUND
On September 22, 2014, the Plaintiff initiated this action alleging contract claims against the
Defendants. See Complaint, docket #1. Defendants Electronic Payment Solutions of America, Inc.,
Wigdore, and Abdelmessh responded to the Complaint on November 12, 2012 with an Answer and
the remaining Defendants – First Pay Solutions, First Data, and Wells Fargo – responded by filing
motions to dismiss for lack of personal jurisdiction. See dockets ##8, 11 and 23. After resolution
of lengthy service issues, the Court issued a Scheduling Order in this case on April 28, 2015.
Docket #57.
In the present motion to stay, Defendants First Data and Wells Fargo claim that a temporary
stay pending resolution of the jurisdictional issues raised in the motions to dismiss is appropriate
“before proceeding to time-consuming and expensive discovery.” Docket #64 at 4. The Court
agrees with the Defendants.
DISCUSSION
The decision to issue a protective order and thereby stay discovery rests within the sound
discretion of the trial court. Wang v. Hsu, 919 F.2d 130, 130 (10th Cir. 1990). Such protection is
warranted, upon a showing of good cause, to “protect a party or person from annoyance,
embarrassment, oppression, or undue burden or expense.” Fed. R. Civ. P. 26(c). Here, Defendants
seek protection from the burdensome expense of discovery at this early stage in the case.
A stay of all discovery is generally disfavored in this District. Chavez v. Young Am. Ins. Co.,
No. 06-cv-02419-PSF-BNB, 2007 WL 683973, at *2 (D. Colo. Mar. 2, 2007). Nevertheless, a stay
may be appropriate if “resolution of a preliminary motion may dispose of the entire action.”
Nankivil v. Lockheed Martin Corp., 216 F.R.D. 689, 692 (M.D. Fla. 2003) (citations omitted).
The following five factors guide the Court’s determination:
(1) plaintiff’s interests in proceeding expeditiously with the civil action and the
potential prejudice to plaintiff of a delay; (2) the burden on the defendants; (3) the
convenience to the court; (4) the interests of persons not parties to the civil litigation;
and (5) the public interest.
String Cheese Incident, LLC v. Stylus Shows, Inc., No. 02-cv-01934-LTB-PAC, 2006 WL 894955,
at *2 (D. Colo. Mar. 30, 2006); see also Golden Quality Ice Cream Co. v. Deerfield Speciality
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Papers, Inc., 87 F.R.D. 53, 56 (E.D. Pa. 1980).
In weighing the factors set forth for determining the propriety of a stay, the Court finds that
a temporary stay of discovery is appropriate in this case. With respect to the first two factors, the
Court balances a plaintiff’s desire to proceed expeditiously with the case against the burden on a
defendant of going forward. Here, the Plaintiff does not object to Defendants’ request to stay
discovery; thus, to the extent the Plaintiff has any interest in proceeding expeditiously, the Court
finds its interest is offset by Defendants’ burden.
Courts have recognized that a stay is warranted while the issue of jurisdiction is being
resolved. See Gilbert v. Ferry, 401 F.3d 411, 416 (6th Cir. 2005) (affirming trial court’s stay of
discovery pending ruling on dispositive motions raising jurisdictional issues). “[S]ubjecting a party
to discovery when a motion to dismiss for lack of personal jurisdiction is pending may subject him
to undue burden or expense, particularly if the motion to dismiss is later granted.” String Cheese
Incident, LLC, 2006 WL 894955 at *2 (imposing a temporary stay of discovery pending resolution
of a motion to dismiss for lack of personal jurisdiction). On balance, the Court finds that any
potential harm to the Plaintiff is outweighed by the burden on Defendants resulting from conducting
and responding to discovery while the motions to dismiss are pending.
Consideration of the remaining String Cheese factors does not tip the balance in favor of
either position. Therefore, weighing the factors necessary to consider whether to grant the requested
stay, the Court finds that a temporary stay of discovery is justified and will be imposed in this case.
III.
Conclusion
Accordingly, for the reasons stated above, it is hereby ORDERED that the Uncontested
Motion to Stay All Discovery Pending Resolution of Certain Defendants’ Motion[s] to Dismiss filed
by Defendants First Data Corporation and Wells Fargo Bank [filed June 23, 2015; docket #64] is
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granted. A temporary stay of discovery is hereby imposed pending resolution of the Defendants’
motions to dismiss. The parties shall file a status report within five (5) days of any order resolving
the motions to dismiss.
Dated at Denver, Colorado, this 24th day of June, 2015.
BY THE COURT:
Michael E. Hegarty
United States Magistrate Judge
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